FinecoBank Banca Fineco (BIT:FBK) Could Be A Buy For Its Upcoming Dividend

Readers hoping to buy FinecoBank Banca Fineco S.p.A. (BIT:FBK) for its dividend will need to make their move shortly, as the stock is about to trade ex-dividend. Typically, the ex-dividend date is two business days before the record date, which is the date on which a company determines the shareholders eligible to receive a dividend. The ex-dividend date is important as the process of settlement involves at least two full business days. So if you miss that date, you would not show up on the company's books on the record date. Meaning, you will need to purchase FinecoBank Banca Fineco's shares before the 19th of May to receive the dividend, which will be paid on the 21st of May.

The company's upcoming dividend is €0.74 a share, following on from the last 12 months, when the company distributed a total of €0.74 per share to shareholders. Last year's total dividend payments show that FinecoBank Banca Fineco has a trailing yield of 3.9% on the current share price of €18.94. If you buy this business for its dividend, you should have an idea of whether FinecoBank Banca Fineco's dividend is reliable and sustainable. That's why we should always check whether the dividend payments appear sustainable, and if the company is growing.

We've discovered 1 warning sign about FinecoBank Banca Fineco. View them for free.

Dividends are typically paid out of company income, so if a company pays out more than it earned, its dividend is usually at a higher risk of being cut. FinecoBank Banca Fineco paid out 69% of its earnings to investors last year, a normal payout level for most businesses.

When a company paid out less in dividends than it earned in profit, this generally suggests its dividend is affordable. The lower the % of its profit that it pays out, the greater the margin of safety for the dividend if the business enters a downturn.

Check out our latest analysis for FinecoBank Banca Fineco

Click here to see the company's payout ratio, plus analyst estimates of its future dividends.

Have Earnings And Dividends Been Growing?

Stocks in companies that generate sustainable earnings growth often make the best dividend prospects, as it is easier to lift the dividend when earnings are rising. If earnings decline and the company is forced to cut its dividend, investors could watch the value of their investment go up in smoke. For this reason, we're glad to see FinecoBank Banca Fineco's earnings per share have risen 18% per annum over the last five years.

Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. In the past 10 years, FinecoBank Banca Fineco has increased its dividend at approximately 14% a year on average. Both per-share earnings and dividends have both been growing rapidly in recent times, which is great to see.

To Sum It Up

Should investors buy FinecoBank Banca Fineco for the upcoming dividend? FinecoBank Banca Fineco has an acceptable payout ratio and its earnings per share have been improving at a decent rate. In summary, FinecoBank Banca Fineco appears to have some promise as a dividend stock, and we'd suggest taking a closer look at it.

In light of that, while FinecoBank Banca Fineco has an appealing dividend, it's worth knowing the risks involved with this stock. To help with this, we've discovered 1 warning sign for FinecoBank Banca Fineco that you should be aware of before investing in their shares.

If you're in the market for strong dividend payers, we recommend checking our selection of top dividend stocks.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.